Taiwan media deal sparks protests over fears it will affect democracy

Taipei: Asian media mogul Jimmy Lai's sale of his Taiwan holdings to a Taiwanese group that includes an outspoken, pro-China businessman has sparked protests in Taipei as fears grow it will rein in a source of lively, independent reporting on the democratic island.

The Taiwan dollars 17.5 billion ($601 million) deal signed late Tuesday in Macau involves the sale of the Taiwanese editions of Apple Daily and Next magazine, as well as Next TV to businessman Tsai Eng-meng, banking scion Jeffrey Koo Jr., Formosa Plastics Group president Wang Wen-yuan, and two other Taiwanese businessmen, the Apple Daily reported Wednesday.

The deal still requires approval by Taiwan regulators.

Riot police try to quell a crowd protesting a Taiwan media sale to a Chinese businessmen in Taipei. AP.

About 100 protesters gathered outside the Cabinet offices Tuesday to protest the sale, focusing their attention on Tsai, who made a fortune selling rice crackers on the Chinese mainland, and whose China Times newspaper is a strong supporter of Chinese policies.

Taiwan Reporters Association head Chen Siao-yi said Tsai's participation in the deal would have a chilling impact on Taiwanese democracy and press freedoms.

"China is having more and more control over Taiwan's politics and economy," she said. "Now they want public opinion too, because it is the missing piece of their puzzle."

Since coming to power 4 1/2 years ago, Taiwanese President Ma Ying-jeou has made better relations with China the centerpiece of his administration, taking a series of bold steps to link the island's high-tech economy ever closer to China's lucrative markets. The sides split after a civil war in 1949, and though China insists it will ultimately bring Taiwan under its control, Ma has promised that any change in its de facto independence will not occur on his watch.

Reacting to Tuesday's demonstration, the Taiwanese government said that regulatory agencies would handle the Next Media case according to the law. But it also said it would be "inappropriate for the government to intervene or interfere because of a certain party's political stance."

In a preliminary look at the deal, Taiwan's Financial Supervisory Commission raised serious questions about the propriety of Koo's participation because of his family's controlling interest in China Trust Financial Holdings, one of the island's most powerful banks. It suggested that financial institutions should not be involved in media ownership.

Earlier this year the National Communications Commission, the government's media watchdog, approved Tsai's purchase of Taiwan's second largest cable TV provider, but made the deal contingent on his selling his cable TV news station and other cable TV outlets. Tsai has since reneged on the promise and the case is in the courts.

Tsai was roundly condemned by Taiwanese of virtually all political stripes earlier this year after he told a Washington Post reporter that accounts of Chinese security forces killing hundreds if not thousands of pro-democracy demonstrators near Beijing's Tiananmen Square in 1989 were vastly overinflated. The accounts are widely accepted in the West as well as in Taiwan.

Tsai returned to the political limelight in September when he underwrote the voyage of a flotilla of 50 Taiwanese fishing vessels to a group of islands between Okinawa and Taiwan claimed by Japan, China and Taiwan. While the fishermen themselves said their action was meant only to underscore their fishing rights in the area, Tsai's China Times newspaper quickly followed through with an editorial calling on China and Taiwan to work together to pursue a joint claim to the islands.

Under Lai's ownership, Apple Daily has emerged as one of Taiwan's most popular newspapers, leveraging a combination of sex, scandal and celebrity gossip to win over many of the island's readers. But it has also maintained a fiercely independent stance on political issues, differentiating itself from most other Taiwanese media outlets, which tend to be partial to one or the other of the island's two large political parties.

Political scientist Lo Chih-cheng of Taipei's Soochow University said that if Tsai insists on Apple Daily cleaving to a clear-cut pro-China line, its sales could quickly plummet.

However, he said, he expects the publication to pull its punches on sensitive China-related issues including Tibet and human rights because Tsai, Wang and Koo all have extensive business interests on the mainland.

Lai, who has a reputation as an anti-China gadfly, has clashed bitterly with Tsai in the past, most notably over their fierce competition to acquire the China Times Group in 2008.

His desire to unload the Taiwan portion of Next Media began after he complained that Taiwanese officials - possibly for political reasons - were making it impossible for him to run his Next TV venture at a profit.